The Hindu : Kerala / Thiruvananthapuram News : Centre eroding States' power to raise resources, says Isaac

Online edition of India's National Newspaper
Tuesday, Aug 29, 2006

Kerala

Kerala - Thiruvananthapuram

Centre eroding States' power to raise resources, says Isaac

Special Correspondent

Seeks recast of Centre-State relations Concentration of powers at the Centre pushes States into financial crisis

Thiruvananthapuram: Finance Minister T.M. Thomas Isaac on Monday stressed the need to recast Centre-State relations in view of the increasing discrimination towards States.

Inaugurating a seminar on `the Vizhinjam container terminal project and Centre-State relations' organised by the DYFI State committee, he said the concentration of powers with the Central Government had pushed the States into a financial crisis.

"The Centre has seriously eroded the States' powers to raise resources. With spending, borrowings and tax collection decided by the Centre, the State Finance Minister has been reduced to a glorified clerk," he said.

Mr. Isaac said Kerala was a victim of the Centre's discriminatory approach. "The Vizhinjam project is a classic example of this attitude. Kerala cannot afford to invest in this project estimated to cost Rs.4,500 crore. While denying security clearance to the Indo-Chinese consortium, the Centre has not specified whether any other company that bids for the project afresh will be acceptable," he said.

Mr. Isaac said the last three finance commissions were unsympathetic towards the development needs of Kerala.

Concerted struggle

Mr. Isaac stressed the need for a concerted struggle against the Centre's biased approach. "Many States find themselves caught in a situation in which they are unable to spend the funds generated by them."

He said Kerala would take the leadership to highlight the Centre's discrimination and demand a reconstitution of Centre-State relations.

State Planning Board Vice-Chairman Prabhat Patnaik accused the Centre of bringing up security issues selectively and arbitrarily to bog down infrastructure projects taken up States.

"The modernisation of airports is entrusted to a foreign firm, disregarding security concerns. The decision to open up the insurance, telecom and civil aviation sector to foreign players was also taken without considering the security implications," he observed.

Mr. Patnaik said the assessment of China as a security threat to India was articulated by the NDA government. That perception continued to be influential today. "

He said the impasse over the Vizhinjam project was symptomatic of the reduced powers of State governments.

He said the agrarian crisis in Kerala and the spate of suicides by farmers were triggered by the Central Government's unilateral decision to bring down the tariff rate for agricultural commodities. Global fluctuations in price today impact on the State economy and affected farmers directly, he said.

Congress assurance

KPCC general secretary M.M. Hassan underlined the need to put aside political differences and lobby with the Centre for the development of the State. The Congress, he said, would join hands with the Government to exert pressure on the Centre for the Vizhinjam project.

Mr. Hassan said the project had been denied security clearance because it was clubbed with the Chennai and Mumbai ports where naval bases were located in the neighbourhood.

He said it would be possible to raise Rs.4,500 crore through Vizhinjam Seaports International Limited, special purpose company set up by the previous government.

Printer friendly page
Send this article to Friends by E-Mail

Kerala